* South Korean stocks rise as much as 3%

* Taiwan stocks rise around 2%

* Bank Indonesia set to keep interest rate unchanged -

Reuters poll

* Rupiah inches higher but hovers around 16,995 a dollar

By Shivangi Lahiri

March 17 (Reuters) - South Korean stocks jumped 3% on

Tuesday, leading gains in emerging Asian markets, driven by

Nvidia's ( NVDA ) bullish forecast for AI chip demand, even as investors

navigate war in the Middle East and a clutch of central bank

meetings this week.

South Korea's benchmark KOSPI index rose as much as

3%, pushing past 5,700 points on the back of a 5% gain in

Samsung Electronics ( SSNLF ) shares. Its rival chipmaker SK

Hynix also gained 3.7%.

Nvidia ( NVDA ) CEO Jensen Huang said its new AI chips were

being made by Samsung, prompting analysts to predict that the

South Korean firm's loss-making foundry business could return to

profit as early as next year.

Taiwan, another tech-heavy stock market which stands

to benefit from a surge in demand for AI chips, rose as much as

2%.

That helped the MSCI EM Asia index advance

about 1.9%.

However, ongoing conflict in the Middle East, now in its

third week, has raised concerns about elevated oil prices,

inflation risks and central banks' responses.

"We do expect this conflict to resolve itself over the next

few weeks, but the issue is that the energy supply might take a

bit longer to come back due to infrastructure rebuilding," Ang

Ze Yi, Asian fixed income senior portfolio manager at AllianzGI,

said.

An equities risk score tracked by DBS analysts showed

volatility at its highest since April last year. They warned

that stress levels could rise further if hostilities in the Gulf

persist.

"A sustained cooling of Middle East tensions is a

prerequisite for markets to pivot their full attention back to

the many central bank meetings this week," DBS analysts wrote.

Markets will be keenly awaiting monetary policy decisions by

the U.S. Federal Reserve, the Bank of Japan, and some of the

other G10 central banks. On Tuesday, the Reserve Bank of

Australia hiked rates for a second straight month to contain

inflation.

In Southeast Asia, Bank Indonesia is expected to keep its

policy interest rate unchanged in a decision just a few hours

away, a Reuters poll showed.

Stocks in Jakarta rose 1.8%, while the rupiah

inched higher to 16,980 per dollar, but remained within striking

distance of its all-time low of 16,995.

Shares in Bangkok rose as much as 2.4% to their

highest since March 2, while those in Kuala Lumpur

advanced 0.9%.

Currencies in emerging Asia were largely muted, with the

Malaysian ringgit gaining as much as 0.3% to hit its

highest level in two weeks.

On the contrary, Thailand's baht slipped to 32.40

against the dollar, while the Philippine peso hovered

close to the key psychological level of 60 per dollar.

HIGHLIGHTS:

** South Korea to decide about any Strait of Hormuz

deployment under law, constitution, says minister

** Taiwan says it has received no information from US on

delay of second arms sale

** Hong Kong leader says he's very concerned about rise in

oil prices

** Japan's underlying inflation accelerating toward BOJ

target, Governor Ueda says

Asia stock indexes and currencies at 0342 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % % DAILY YTD %

%

Japan -0.15 -1.66 China C>

India +0.02 -2.74 Indonesia +0.06 -1.80 Malaysia +0.20 +3.47 Philippine -0.11 -1.52 S.Korea 1>

Singapore -0.10 +0.53 Taiwan +0.15 -1.45 Thailand -0.23 -2.89